The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Banking and Insurance
BILL: SB 1680
INTRODUCER: Senator Gruters
SUBJECT: Financial Institutions
DATE: January 14, 2022
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Schrader Knudson BI Pre-meeting
2. AP
3. RC
I. Summary:
SB 1680 makes a number of revisions to Florida law relating to financial institutions. The bill:
Allows foreign nationals proposing to own 10 percent or more of any class of voting
securities of a proposed or established bank to appear by video during the public hearing
considering approval of the application;
Prohibits the direct or indirect charging of a fee to a customer by a third-party agent or other
entity for an online audit verification of the associated balance of an account which is
maintained by a financial institution;
Revises the required scheduling dates for examination of financial institutions;
Allows the Office of Financial Regulation (OFR) 90 additional days to meet its statutory
obligation to periodically examine a financial institution when a federal agency suspends or
cancels a previously scheduled examination;
Changes from “all or substantially all” assets to 50 percent of assets, liabilities, or a
combination of assets and liabilities, the limit of assets that a mutual financial institution may
sell to a stock financial institution, absent first converting to a capital stock financial
institution;
Revises the definition of “financial institution” for the Florida Control of Money Laundering
and Terrorist Financing in Financial Institutions Act;
Requires credit unions, within 30 days following a meeting where any director, officer,
member of the supervisory or audit committee, member of the credit committee, or credit
manager is elected or appointed, to notify the OFR;
Revises the scope of the OFR’s investigation of applicants seeking authority to start a bank
or trust company to include the need for bank and trust facilities in a target market as well as
in the primary service area, and the ability of the target market to support the proposed bank
or trust company;
REVISED: BILL: SB 1680 Page 2
Revises a requirement that the proposed president or chief executive officer of a proposed
banking corporation have at least 1 year of direct experience as an executive officer, director,
or regulator of a financial institution within the last 5 years to repeal the 5-year requirement;
Requires that persons acquiring a controlling interest in a state bank or state trust company
through probate or trust notify the OFR within 90 days after acquiring such interest;
Defines a “de novo branch” for the purposes of an existing de novo interstate branching
provision;
Authorizes a family trust company or licensed family trust company to maintain the deposit
account, required under current law, with any bank that is insured by the Federal Deposit
Insurance Corporation, or with any credit union insured by the National Credit Union
Administration, either of which must be located within the United States;
Revises when family trust companies, licensed family trust companies, or foreign licensed
family trust companies must file a required annual renewal application;
Allows international bank agencies and international branches to maintain a required deposit
in banks outside of Florida, provided the deposit is in a bank within the United States; and
Requires qualified limited service affiliates to suspend otherwise permissible activities if the
jurisdiction of an international trust entity served by the qualified limited service affiliate is
identified on the Financial Action Task Force’s list of High-Risk Jurisdictions subject to a
Call for Action (black list) or on the list of Jurisdictions Under Increased Monitoring (grey
list).
The bill is effective July 1, 2022.
II. Present Situation:
Regulation of Financial Institutions
Florida law defines the term “financial institution” broadly; the term includes “state and federal
savings or thrift associations, banks, savings banks, trust companies, international bank agencies,
international banking corporations, international branches, international representative offices,
international administrative offices, international trust entities, international trust company
representative offices, qualified limited service affiliates, credit unions, agreement corporations
operating pursuant to s. 25 of the Federal Reserve Act, 12 U.S.C. ss. 601 et seq. and Edge Act
corporations organized pursuant to s. 25(a) of the Federal Reserve Act,
12 U.S.C. ss. 611 et seq.”
1
However, not all financial institutions are expressly authorized to accept or hold deposits or
certificates of deposits.
2
1
Section 655.005(1)(i), F.S.
2
For instance, holding a deposit does not fall within the enumerated permissible activities of an international representative
office, an international administrative office, an international trust company representative office, or a qualified limited
service affiliate. See ss. 663.062, 663.063, 663.409, and 663.531, F.S. BILL: SB 1680 Page 3
Dual Regulatory System
Banks and credit unions may be either state or federally chartered. The Office of Financial
Regulation (OFR) is responsible for chartering and supervising state financial institutions,
including state-chartered banks and state-chartered credit unions.
3
National banks are chartered pursuant to the National Bank Act and supervised by the Office of
the Comptroller of the Currency (OCC).
4
National banks are required to be members of the
Federal Reserve System; state banks may apply for membership.
5
The Federal Reserve is the
primary federal regulator of state member banks, and also serves as the primary regulator of bank
holding companies and financial holding companies.
6
Federally-chartered credit unions are chartered and supervised by the National Credit Union
Administration (NCUA).
7
Both state- and federally-chartered credit unions must obtain
insurance of their accounts and are subject to examination by the NCUA.
8
Consumer Protection Florida Deceptive and Unfair Trade Practices Act (FDUTPA)
History and Purpose of FDUTPA
The Florida Deceptive and Unfair Trade Practices Act (FDUTPA) is a consumer and business
protection measure that prohibits unfair methods of competition, unconscionable acts or
practices, and unfair or deceptive acts or practices in trade or commerce.
9
The state attorney or
the Department of Legal Affairs may bring actions when it is in the public interest on behalf of
consumers or governmental entities.
10
The Office of the State Attorney may enforce violations of
the FDUTPA if the violations take place in its jurisdiction. The Department of Legal Affairs has
enforcement authority if the violation is multi-jurisdictional, the state attorney defers in writing,
or the state attorney fails to act within 90 days after a written complaint is filed.
11
Consumers
may also file suit through private actions.
12
Remedies under the FDUTPA
The Department of Legal Affairs and the State Attorney, as enforcing authorities, may seek the
following remedies:
Declaratory judgments;
Injunctive relief;
Actual damages on behalf of consumers and businesses;
3
Section 655.012(1)(a), F.S.
4
12 U.S.C. s. 481.
5
12 U.S.C. s. 208.3 and 222.
6
12 U.S.C. s. 248.
7
See 12 U.S.C. s. 1751, et. seq.
8
Section 657.033, F.S.; 12 U.S.C. s. 1784.
9
Section 501.202, F.S.
10
Sections 501.207 and 501.202, F.S. David J. Federbush, FDUTPA for Civil Antitrust: Additional Conduct, Party, and
Geographic Coverage; State Actions for Consumer Restitution, 76 FLA. B.J. 52, December 2002, available at
http://www.floridabar.org/divcom/jn/jnjournal01.nsf/c0d731e03de9828d852574580042ae7a/99aa165b7d8ac8a485256c8300
791ec1!OpenDocument&Highlight=0,business,Division* (last visited on Jan. 13, 2022).
11
Section 501.203(2), F.S.
12
Section 501.211, F.S. BILL: SB 1680 Page 4
Cease and desist orders;
Civil penalties of up to $10,000 per willful violation; and
Civil penalties of up to $15,000 per willful violation where certain aggravating factors are
found.
13
Remedies for private parties are limited to:
A declaratory judgment and an injunction where a person is aggrieved by a FDUTPA
violation; and
Actual damages, attorney fees and court costs, where a person has suffered a loss due to a
FDUTPA violation.
14
Exemptions under the FDUTPA
FDUTPA exempts certain entities from its governance, including:
15
Any person or activity regulated under laws administered by the Office of Insurance
Regulation of the Financial Services Commission (OIR);
Banks, credit unions, and savings and loan associations regulated by the OFR;
Banks, credit unions, or savings and loan associations regulated by federal agencies; or
Any person or activity regulated under the laws administered by the former Department of
Insurance, which are now administered by the Department of Financial Services (DFS).
Examination of Financial Institutions
Pursuant to s. 655.045(1), F.S., the OFR is required to conduct and examination of each state
financial institution at least every 18 months. Section 655.045(1)(a), F.S.; however, allows the
OFR to accept an examination from an appropriate federal regulatory agency or may conduct a
joint or concurrent examination of the institution with the federal agency. However, at least once
every 36 months, the OFR must conduct an examination of each state financial institution in a
manner that allows the preparation of a complete examination report not subject to the right of a
federal or other non-Florida entity to limit access to the information contained therein. The
alternating, joint, or concurrent examination authorized by this provision reduces regulatory
burden on the financial institutions subject to dual regulation, and the OFR works in coordination
with these federal agencies when possible.
16
According to OFR, many of the documents it must analyze in these examinations are paper files
with digital copies not available. As such, examiners must be physically present at an institution
to perform examinations. The COVID-19 pandemic has created issues in adhering to
examination schedules. Additionally, other natural disasters (such as hurricanes) can create
problematic examination environments.
17
13
Sections 501.207(1), 501.2075, 501.2077, and 501.208, F.S.
14
Sections 501.211(1)-(2) and 501.2105, F.S.
15
Section 501.212(4), F.S.
16
Office of Financial Regulation, SB 1680 Analysis (Jan. 12, 2022) (on file with the Senate Committee on Banking and
Insurance).
17
Id. BILL: SB 1680 Page 5
Financial Institution Acquisition of Assets and Assumption of Liabilities
Current law allows a financial entity, under s. 655.414, F.S., to acquire “all or substantially all”
of the assets of, or assume all or any part of the liabilities of, any other financial institution
subject to certain conditions. Similarly, subsection (6) of the statute states that a mutual financial
institution may not sell “all or substantially all” of its assets to a stock financial institution,
subject to certain conditions. For both of these provisions, the term “substantially all” is not
defined and may be subject to some conjecture. According to the OFR, this undefined term has
caused some confusion in the financial industry.
18
Money Laundering and Terrorist Financing in Financial Institutions Act
The Florida Control of Money Laundering and Terrorist Financing in Financial Institutions Act,
under s. 655.50, F.S., was created to require the submission certain reports to the OFR and the
maintenance of certain records involving currency or monetary instruments or suspicious
activities where such reports and records deter the use of financial institutions to conceal, move,
or provide proceeds relating to criminal or terrorist activities and if such reports and records have
a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings.
Subsection (3) of the act defines “financial institutions” a financial institution, as defined in
31 U.S.C. s. 5312, as amended, including a credit card bank, located in this state. This definition
is quite broad, and includes a number of entities over which the OFR generally does not have
regulatory authority—such as the United States Postal Service, casinos, travel agencies—or are
obsolete—such as telegraph companies.
19
Credit Union Boards of Directors
Section 657.021(1)-(6), F.S., specifies the minimum requirements for boards of directors for
credit unions, including the filling of vacancies, meeting requirements, and conduct
requirements. As part of these requirements, subsection (2) requires that directors assuming
office in a credit union make a prescribed oath, and a signed copy of the oath must be filed with
the OFR within 30 days after election. According to the OFR, at the Federal-level, the NCUA
historically required credit unions to submit a record of the names and addresses of the members
of the board of directors, members of the committees on a particular form called “Report of
Officials.” The OFR had access to these documents through agreements with the NCUA.
However, in 2009, the NCUA moved to a web-based system to collect this data and the forms
were no longer collected.
20
At present Florida law does not require state-chartered credit unions
to submit a similar report.
18
Supra note Error! Bookmark not defined..
19
The world’s last telegram was sent in 2013. Monica Sarkar, The Day Telegrams Came to a Final STOP, CNN (July 15,
2013).
20
NCUA Supervisory Letter 09-CU-17, “Credit Union Online: Credit Union Profile and 5300 Call Report,” National Credit
Union Administration, available at https://www.ncua.gov/regulation-supervision/letters-credit-unions-other-guidance/credit-
union-online-credit-union-profile-and-5300-call-report (August 2009). BILL: SB 1680 Page 6
Target Markets
According to the American Bankers Association, nearly 75 percent of United States residents
most often access their bank accounts via electronic platforms (i.e., via mobile device or personal
computer).
21
With this ever-growing trend, and branch traffic slowing, many banks have been
closing bank branches at a growing pace and making investments in electronic platforms.
22
While the trend in banking has been to de-emphasize the local branch, a Florida application for
authority to organize a banking corporation or trust company must describe the community
where the principal office of the bank will be located
23
and part of the OFR’s approval process
looks at the need for, and ability to support, the proposed bank or trust company in the entity’s
primary service area.
24
In order for an application to be approved, the local conditions in the
primary service area must indicate a reasonable promise of successful operation.
25
The OFR
evaluates the viability of the business plan in light of current conditions in the primary service
area and the metropolitan statistical area or county, as well as in the industry in general.
26
Applications for Authority to Organize a Banking Corporation or Trust Company
Section 658.19, F.S., specifies the requirements for an application for authority to organize a
banking corporation or trust company, which must be filed with the OFR by the proposed
directors, and what the application must include. Upon the submission of this application,
pursuant to s. 658.20, F.S., the OFR must investigate the:
Character, reputation, financial standing, business experience, and business qualifications of
the proposed officers and directors;
Need for bank or trust facilities or additional bank or trust facilities, as the case may be, in
the primary service area where the proposed bank or trust company is to be located; and
Ability of the primary service area to support the proposed bank or trust company and all
other existing bank or trust facilities in the primary service area.
Section 658.20, F.S., also authorizes the OFR to obtain criminal record information from the
National Crime Information Center or from the Florida Department of Law Enforcement (FDLE)
to conduct the required investigation.
To approve an application, the OFR must find, in part, that:
27
Local conditions indicate reasonable promise of successful operation for the proposed state
bank or trust company;
The proposed capitalization is in such amount as the OFR deems adequate;
The proposed capital structure is in such form as the OFR may require;
21
Survey: Bank Customers Preference for Digital Channels Continues to Grow, American Bankers Association,
https://bankingjournal.aba.com/2019/11/aba-survey-customer-preference-for-digital-banking-continues-to-grow (November
5, 2019).
22
Id.
23
Section 658.19, F.S.
24
Section 658.20, F.S.
25
Rule 69U-105.206(2)(a), F.A.C.
26
Rule 69U-105.206(2)(a)1.-2., F.A.C.
27
Section 658.21. F.S. BILL: SB 1680 Page 7
The proposed officers have sufficient financial institution experience, ability, standing, and
reputation in order to be approved. As part of this requirement, the proposed president or
chief executive officer must have at least 1 year of direct experience as an executive officer,
director, or regulator of a financial institution within the last 5 years;
The corporate name of the proposed state bank or trust company is approved by the OFR;
and
Provision has been made for suitable quarters at the location specified in the application.
In regards to the requirement that the proposed president or chief executive officer have at least
1 year of direct experience as an executive officer, director, or regulator of a financial institution
within the last 5 years, the OFR has expressed a concern that this provision narrows the pool of
otherwise qualified potential executive officers who may serve in that capacity at a new Florida-
chartered bank. By comparison, proposed chief executive officers of proposed nationally
chartered banks are not subject to a similar restriction.
28
Trust Representative Offices
According to 12 C.F.R. s. 9.2(k), a trust representative office is an office of a national bank,
other than a main office or a branch, at which the bank engages in certain activities relating to
their fiduciary business. Examples of such activities include advertising, marketing, and
soliciting for fiduciary business; contacting existing or potential customers, answering questions,
and providing information about matters related to their accounts; acting as a liaison between the
trust office and the customer; and inspecting or maintaining custody of fiduciary assets or
holding title to real property.
In Florida, the OFR supervises state-chartered banks with trust powers and state-chartered trust
companies. The determination of whether an entity qualifies as a “trust company” is dependent
on whether an entity has “trust powers” and is engaging in “trust business,” defined as follows:
29
“Trust powers” means the rights and powers necessary to act as a fiduciary and, when the
context so requires or admits, the term also means the authority granted to a bank, state or
federal association, or trust company by, or pursuant to, the laws of this or any other
jurisdiction to engage in trust business.
“Trust business” means the business of acting as a fiduciary when such business is conducted
by a bank, a state or federal association, or a trust company, or when conducted by any other
business organization for compensation that the OFR does not consider to be de minimis.
Based on this definition, an office that provides just ancillary fiduciary services to a
nationally-chartered bank or trust company (or one chartered by another state) would not qualify
as a trust company.
28
Supra note Error! Bookmark not defined..
29
Section 658.12, F.S. BILL: SB 1680 Page 8
Controlling Interests in State Banks and Trust Companies
Under s. 658.28, F.S., for the purposes of determining whether a party has acquired control of a
bank or trust company, in general, a party will be presumed to have such control if any of the
following are true:
The party directly or indirectly owns, control, or has the power to vote 25 percent or more of
any class of voting securities of the institution;
The party controls, in any manner, the election of a majority of the directors, trustees, or
other governing body of the institution;
The party owns, controls, or has the power to vote 10 percent or more of any class of voting
securities and exercise a controlling influence over management or policies of the institution;
or
The OFR determines, after notice and opportunity for a hearing, that the person or persons
directly or indirectly exercises a controlling influence over the bank or trust company.
In addition, the OFR is not limited to the above standards or criteria in determining whether any
such person may be deemed to be acting by or through one or more other persons. The
presumption above, regarding where a party owns, controls, or has the power to vote 10 percent
or more of any class of voting securities and exercise a controlling influence over management
or policies of the institution, is rebuttable by notifying the OFR and presenting information
rebutting control at an informal conference.
30
After such hearing, if the OFR determines that the
party in question does, in fact, have control of the bank or trust company, the party must file the
application required under s. 658.28(1), F.S.
Section 658.28(1), F.S., also requires persons seeking to purchase or otherwise acquire
controlling interest in a state bank or trust company, to first apply with the OFR for a certificate
of approval. Approval is based upon the OFR’s determination, after investigation and review,
that the proposed new owners are qualified by reputation, character, experience, and financial
responsibility to control and operate the bank or trust company and that the interests of the other
stockholders, if any, the depositors and creditors of the bank or trust company, and the public
generally will not be jeopardized by the proposed change.
Florida law does not currently contemplate the acquisition of a controlling interest without prior
approval. However, according to the OFR, not every such acquisition is planned. Shares may
pass to an unapproved owner by operation of law, such as by way of inheritance. For example, if
a controlling shareholder dies and their shares pass to an unapproved beneficiary, the unapproved
beneficiary commits an unavoidable, technical violation of statute upon becoming the owner of
the shares.
31
De Novo Interstate Branching by State Banks
Section 658.2953(11)(a), F.S., permits state banks to, with approval of the OFR, establish and
maintain a de novo branch or acquire a branch in a state other than Florida by submitting an
30
Section 658.28(3), F.S.
31
Supra note Error! Bookmark not defined.. BILL: SB 1680 Page 9
application to the OFR. Section 658.2953(11)(a), F.S., also allows out-of-state bank meeting
certain conditions to establish and maintain a de novo branch or acquire a branch in Florida.
Family Trust Companies
A family trust company provides trust services to wealthy families and cannot provide services
to the general public. These services include serving as a trustee of trusts held for the benefit of
the family members, as well as providing other fiduciary, investment advisory, wealth
management, and administrative services to the family. A family might wish to form a family
trust company in order to keep family matters more private than they would be if turned over to
an independent trustee, to gain liability protection, to establish its own trust fee structure, and to
obtain tax advantages. Traditional trust companies require regulatory oversight, licensing of
investment personnel, public disclosure and capitalization requirements considered by
practitioners to be overbroad and intrusive for the family trust.
In 2014, the Legislature authorized the creation of family trust companies in Florida.
32
The
Florida Family Trust Company Act is codified in ch. 662, F.S. The Act allows for the creation of
family trust companies in Florida and provides differing degrees of regulatory oversight by the
OFR.
Chapter 662, F.S., creates three types of family trust companies: family trust companies, licensed
family trust companies, and foreign licensed family trust companies. A “family trust company”
is a corporation or limited liability company that is exclusively owned by one or more family
members, is organized or qualified to do business in this state, and acts or proposes to act as a
fiduciary to serve one or more family members.
33
A “licensed family trust company” means a
family trust company that has been issued a license that has not been revoked or suspended by
the OFR.
34
A “foreign licensed family trust company” means a family trust company that is
licensed by a state other than Florida, or the District of Columbia.
35
Family trust companies that
are not licensed and foreign family trust companies must register the OFR and renew such
registration annually.
36
Family trust companies and licensed family trust companies must
maintain a deposit account with a state-chartered or national financial institution that has a
principal or branch office in Florida.
37
Asset Maintenance or Capital Equivalency for International Bank Agencies and
International Branches
International bank agencies and international branches are permitted to conduct activities similar
to those of a state-chartered financial institution in regards to loans, extension of credit, or
investment. An international bank agency may act as custodian and may furnish investment
32
Chapter 2014-97, Laws of Fla.
33
See s. 662.111(12), F.S., and does not serve as a fiduciary for a person, entity, trust, or estate that is not a family member,
except that it may serve as a fiduciary for up to 35 individuals who are not family members if the individuals are current or
former employees of the family trust company or one or more trusts, companies, or other entities that are family members
34
See s. 662.111(16), F.S.
35
See s. 662.111(15), F.S.
36
See ss. 662.122 and 662.128, F.S.
37
Section 662.1225(1), F.S. BILL: SB 1680 Page 10
management, and investment advisory services, to nonresident entities or persons whose
principal places of business or domicile are outside the United States and to resident entities or
persons with respect to international, foreign, or domestic investments.
38
An international branch
has the same rights and privileges as a federally-licensed international branch.
39
Under s. 663.07,
F.S., each international bank agency and international branch must maintain, with one or more
banks in this state evidence of dollar deposits or investment securities, as specified by the OFR,
of the type that may be held by a state bank.
Financial Action Task Force (FATF)
The FATF is an international global money laundering and terrorist financing watchdog group. It
is an intergovernmental policy-making body that sets international standards and advocates to
bring about national legislative and regulatory reforms.
40
The FATF currently comprises 39
member jurisdictions and two regional organizations (the European Council and the Gulf Co-
operation Council). These members represent most major global financial centers.
41
As part of its
activities, the FATF publishes, three times per year, two public documents that identify
jurisdictions having weak measures to combat money laundering and terrorist financing: 1)
High-Risk Jurisdictions subject to a Call for Action, and 2) Jurisdictions under Increased
Monitoring.
42
High-Risk Jurisdictions subject to a Call for Action
According to FATF, the jurisdictions identified on the High-Risk Jurisdictions subject to a Call
for Action (also known as the “black list”) have significant strategic deficiencies in their regimes
to counter money laundering, terrorist financing, and financing of proliferation. For such
jurisdictions, the FATF calls on all of its members and urges all jurisdictions to apply enhanced
due diligence, and in the most serious cases, countries are called upon to apply counter-measures
to protect the international financial system from the ongoing money laundering, terrorist
financing, and proliferation financing risks emanating from the country.
43
Due to the ongoing
COVID-19 pandemic, FATF has paused the review process for countries on the list of High-Risk
Jurisdictions subject to a Call for Action given that the countries on the list—North Korea and
Iran—are already subject to the FATF’s call for countermeasures.
44
Jurisdictions under Increased Monitoring
Jurisdictions identified as being under increased monitoring (also known as the “grey list”) by
the FATF are actively working with the organization to address strategic deficiencies in their
38
Section 663.061, F.S.
39
Section 663.064, F.S.
40
About, Financial Action Task Force, https://www.fatf-gafi.org/about/ (last visited Jan. 13, 2022).
41
FATF Members and Observers, Financial Action Task Force, https://www.fatf-gafi.org/about/membersandobservers/ (last
visited Jan. 13, 2022).
42
Topic: High-risk and other monitored jurisdictions, Financial Action Task Force, https://www.fatf-
gafi.org/publications/high-risk-and-other-monitored-jurisdictions/?hf=10&b=0&s=desc(fatf_releasedate) (last visited Jan. 13,
2022).
43
Id.
44
High-Risk Jurisdictions subject to a Call for Action - October 2021, Financial Action Task Force, http://www.fatf-
gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-october-2021.html (Oct. 21,
2021). BILL: SB 1680 Page 11
regimes to counter money laundering, terrorist financing, and proliferation financing.
Jurisdictions identified as such are subject to increased monitoring, but have committed to
swiftly resolve the deficiencies identified by the FATF within an agreed upon timeframe.
45
Qualified Limited Service Affiliates of International Trust Entities (QLSA)
Part IV of Chapter 663, F.S., regulates QLSAs in Florida. Pursuant to s. 663.530, F.S., a QLSA
means a person or entity that is qualified under this part to perform the permissible activities
outlined in s. 663.531, F.S., related to or for the benefit of an affiliated international trust entity.
This section also defines an “international trust entity” as an international trust company or
organization, or any similar business entity, or an affiliated or subsidiary entity that is licensed,
chartered, or similarly permitted to conduct trust business in a foreign country or countries under
the laws where such entity is organized and supervised. Section 663.531(1), F.S., allows a QLSA
to engage in:
Marketing and liaison services related to or for the benefit of the affiliated international trust
entities, directed exclusively at professionals and current or prospective nonresident clients of
an affiliated international trust entity;
Advertising and marketing at trade, industry, or professional events;
Transmission of documents between the international trust entity and its current or
prospective clients or a designee of such clients; and
Transmission of information about the trust or trust holdings of current clients between
current clients or their designees and the international trust entity.
To qualify as a QLSA, the entity must file a written notice with the OFR that includes, in part, a
declaration (under penalty of perjury) that jurisdiction of the international trust entity or its
offices, subsidiaries, or any affiliates that are directly involved in or facilitate the financial
services functions, banking, or fiduciary activities of the international trust entity is not listed on
the Financial Action Task Force Public Statement or on its list of jurisdictions with deficiencies
in anti-money laundering or counterterrorism.
46
While this is a required disclosure, the OFR
asserts that it does not have a mechanism to suspend or revoke the qualification of the QLSA if
the jurisdiction of the international trust entity is later added to this list.
47
III. Effect of Proposed Changes:
Section 1 amends s. 120.80(3)(a), F.S., to allow a foreign national proposing to own or control
10 percent or more of any class of voting securities of a proposed or established bank, trust
company, or capital stock savings association to appear at the public hearing required to be held
for such matter via video conference in lieu of appearing personally.
45
Jurisdictions under Increased Monitoring - October 2021, Financial Action Task Force, http://www.fatf-
gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-february-2021.html (Oct.
21, 2021). Countries currently on the grey list, as of the most recent October 2021 update are: Albania, Barbados, Burkina
Faso, Cambodia, Cayman Islands, Haiti, Jamaica, Jordan, Mali, Malta, Morocco, Myanmar, Nicaragua, Pakistan, Panama,
Philippines, Senegal, South Sudan, Syria, Turkey, Uganda, Yemen, and Zimbabwe. Botswana and Mauritius were most
recently removed from the list.
46
Section 663.532(1)(i)3., F.S.
47
Supra note Error! Bookmark not defined.. BILL: SB 1680 Page 12
Section 2 amends s. 475.01, F.S., to update a cross-reference to implement changes made to
s. 658.12, F.S., in the bill.
Section 3 creates s. 501.2076, F.S., to make the direct or indirect charging of a customer a fee,
by a third-party agent or other entity, for an online audit verification of the associated balance of
an account which is maintained by a financial institution, a violation of the FDUTPA.
Section 4 amends s. 518.117, F.S., to update a cross-reference to implement changes made to
s. 658.12, F.S., in the bill.
Section 5 amends s. 655.045(1)(a), F.S., to revise the specific date of July 1, 2014, to July 1,
2023, which the scheduling of examinations are pegged to for financial institutions.
The section also creates s. 655.045(1)(f), F.S., to allow the OFR an additional 90 days to meet
the examination frequency requirement under the section when a federal agency suspends or
cancels a previously scheduled examination. The examination requirement would be considered
to have been met upon the federal agency in question conducting the examination—or the OFR
conducting the examination instead.
The section also amends s. 655.045(4), F.S., to require each director of a state financial
institution to sign a receipt regarding an examination report, with the signature certifying that the
director has read the report. The signed receipt must be returned to the OFR.
Section 6 amends s. 655.414, F.S., to revise language allowing financial entities to acquire “all
or substantially all” of the assets of, or assume all or any part of the liabilities of, any other
financial institution subject to certain conditions. The bill updates this language to read
“50 percent or more of the assets of, liabilities of, or a combination of assets and liabilities of.”
The 50 percent is calculated based on the most recent quarterly reporting date.
Similarly, subsection (6) of the section presently states that a mutual financial institution may not
sell “all or substantially all” of its assets to a stock financial institution, without certain
conditions being met. The bill also updates this to read “50 percent or more.”
Section 7 amends s. 655.50, F.S., to revise the definition of “financial institution” for the Florida
Control of Money Laundering and Terrorist Financing in Financial Institutions Act. The
definition is changed to repeal a reference to federal law and to instead mean any financial
institution, as defined in Florida law,
48
other than an international representative office, an
international administrative office, or a qualified limited service affiliate.
Section 8 creates s. 657.021(2), F.S., to require credit unions, within 30 days following a
meeting where any director, officer, member of the supervisory or audit committee, member of
the credit committee, or credit manager is elected or appointed, to submit to the OFR the names
and residence addresses of the elected person or persons on a specified form. The provision also
directs the OFR to adopt rules to create the form.
48
Section 655.005(1)(i), F.S. BILL: SB 1680 Page 13
Section 9 repeals s. 657.028(6), F.S., which requires notice to OFR of changes in management
similar to those created in Section 8 of this bill.
Section 10 amends s. 658.12, F.S., to create a definition for “target market” to mean the group of
clients or potential clients from whom a bank or proposed bank expects to draw deposits and to
whom a bank focuses or intends to focus its marketing efforts. The term also means the group of
clients or potential clients from whom a trust company, a trust department of a bank or
association, a proposed trust company, or a proposed trust department of a bank or an association
expects to draw its fiduciary accounts and to whom it focuses or intends to focus its marketing
efforts.
Section 11 amends s. 658.20, F.S., to incorporate the definition of target market created in
Section 10 and effectively expand the scope of the OFR’s investigation (regarding an application
for authority to organize a bank or trust company) to include the need for bank and trust facilities
in a target market as well as in the primary service area, and the ability of a target market to
support the proposed bank or trust company.
Section 12 amends s. 658.21, F.S., to revise a requirement that, for the OFR to approve an
application for authority to organize a banking corporation or trust company, the proposed
president or chief executive officer must have at least 1 year of direct experience as an executive
officer, director, or regulator of a financial institution within the last 5 years. The revision
eliminates the requirement that the 1 year of experience be within the last 5 years.
Section 13 creates s. 658.28, F.S., to create a requirement that persons acquiring a controlling
interest in a state bank or state trust company through probate or trust notify the office within
90 days after acquiring such interest. The bill also stipulates that this interest does not give rise to
a presumption of control unless such persons votes the shares or the office has issued a certificate
of approval in response to an application approval of change control pursuant to subsection (1) of
the section.
Section 14 amends s. 658.2953, F.S., to create a definition of “de novo branch” to mean a branch
of a financial institution which is originally established by the financial institution as a branch
and does not become a branch of such financial institution as a result of specified transactions.
This clarifies the applicability of s. 658.2953(11), F.S., which regulates de novo interstate
branching, but currently does not define the term.
Section 15 amends s. 662.1225, F.S., to allow a family trust company or licensed family trust
company to maintain the deposit account, required under the section, with any bank that is both
insured by the Federal Deposit Insurance Corporation and located in the United States, or with a
credit union insured by the National Credit Union Administration and located in the United
States. Under current law, such companies were limited to only state-chartered or national
financial institution that has a principal or branch office in Florida.
Section 16 amends s. 662.128, F.S., to require family trust companies, licensed family trust
companies, or foreign licensed family trust companies to file an annual renewal application no
later than 45 days after the anniversary of the filing of either the initial application or the prior
year’s renewal application. The previous requirement under s. 662.128, F.S., has also been BILL: SB 1680 Page 14
retained in the section, specifying that such entities must file their renewal 45 days after the end
of each calendar year. As presently written, this may require entities, other than those whose
anniversary dates fall within the first 45 days of the year, to file two renewals each year.
Section 17 amends s. 633.07, F.S., to allow international bank agencies and international
branches to maintain the required deposit amount under the section with one or more banks
insured by the Federal Deposit Insurance Corporation and located within the United States.
Under current law, the deposit had to be maintained at a bank in Florida.
Section 18 amends s. 663.532, F.S., to require qualified limited service affiliates (QLSA) to
suspend the activities the QLSA is otherwise permitted to engage in, under s. 663.408, F.S., if
the QLSA or the OFR becomes aware that the jurisdiction of an international trust entity served
by the QLSA is included on the Financial Action Task Force (FATF) list of High-Risk
Jurisdictions subject to a Call for Action (black list) or list of Jurisdictions Under Increased
Monitoring (grey list). Such a suspension of activities must continue until the jurisdiction in
question is removed from the FATF black list or grey list.
As of the most recent October 2021 update, the following countries are on the FATF grey list:
Albania, Barbados, Burkina Faso, Cambodia, Cayman Islands, Haiti, Jamaica, Jordan, Mali,
Malta, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Philippines, Senegal, South Sudan,
Syria, Turkey, Uganda, Yemen, and Zimbabwe. Presently, North Korea and Iran are on the
FATF black list.
Section 19 amends s. 736.0802, F.S., to update a cross-reference to implement changes made to
s. 658.12, F.S., in the bill.
Section 20 provides an effective date of July 1, 2022.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
The bill does not require counties or municipalities to spend funds or limit their authority
to raise revenue or receive state-shared tax revenues as specified in article VII, section 18
of the Florida Constitution.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None. BILL: SB 1680 Page 15
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
None.
C. Government Sector Impact:
Section 5 of SB 1680 could lead to the OFR taking on additional examination costs in the
event that a federal agency suspends or cancels a financial institution examination and the
OFR ends up conducting the examination in that agency’s stead.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends the following sections of the Florida Statutes: 120.80, 475.01,
518.117, 655.045, 655.414, 655.50, 657.021, 657.028, 658.12, 658.20, 658.21, 658.28, 658.2953,
662.1225, 662.128, 663.07, 663.532, and 736.0802.
This bill creates section 501.2076 of the Florida Statutes.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.